SIMBA Chain is one of the U.S. government’s blockchain biggest partners, but you’ve probably never heard of them. The blockchain-as-a-service (BaaS) platform helps government agencies and companies like Boeing develop tailored blockchain solutions.
Computer scientist Ian Taylor was a professor at the University of Notre Dame when he started and incubated SIMBA in 2017 thanks to a grant from DARPA (Defense Advanced Research Projects Agency). The mission: develop secure blockchain messaging for the military. DARPA is the research and development arm of the Department of Defense, tasked with identifying and investing in breakthrough technology to maintain national security. For years, it has tapped startups for innovative solutions.
After raising more than $25 million in funding in 2021, SIMBA won high-value government contracts, including a $30 million contract from the U.S. Air Force as well as agreements with other government agencies. Described as Stripe for blockchain, SIMBA also works with companies across multiple sectors to manage assets and track supply chains.
The U.S. Federal government is expected to spend over $130B annually on contractor-supplied IT products and services in 2024, making it a huge opportunity. But many startups overlook government contracts because of the cumbersome procurement processes. Taylor believes that’s a big mistake. “While the contracting process can be challenging, the size of the market is big enough to more than compensate for any difficulties they may face,” Taylor says. He offers insights and advice for small businesses exploring Federal contract opportunities.
Amy Guttman: How much government experience did your team have when you won the DARPA contract in 2016?
Ian Taylor: Some were hired to help us but mostly, in terms of contracting and understanding what works technically, we learnt as we grew. We’ve executed many small business contracts and recently we’re getting more long-term contracts, like with the Air Force.
Guttman: What are some of the benefits of working with the Federal government?
Taylor: Federal funding is predictable and to an extent counter-cyclical. While other blockchain companies collapsed or went into hibernation in the crypto-winter, government contracts meant our funding was secure and constant – we even saw dramatic growth over the last year. The government always pays its bills and on a predictable basis. In addition, unlike some private-sector contracts which can be short-lived or unpredictable, government contracts can provide longer-term stability. They might last for multiple years and often come with the potential for extensions. It’s given us the runway to develop and grow our product offerings and gives us a long-term focus on how our technology can develop. Unlike firms that are solely focused on commercial sectors, we are not forced to pursue short-term opportunities that dilute our strategy or becoming stuck following the latest gyration in the hype cycle.
Guttman: What advice do you have for tech startups exploring government contracts?
Taylor: There are some critical elements to working with the government.
-Build relationships with buyers and others by attending conferences
Nothing beats knowing the relevant buyers and influencers and having a broad network of contacts in both the Federal government and other contractors. It enables us to understand an agency’s needs and emerging opportunities. We have a better chance of winning a contract if we’re aware of it before it’s formally announced.
-Partner with system integrators (SI’s)
We strongly recommend developing relationships with major system integrators (SI) and consulting firms in the Federal market. They have huge contracts and enormous staff identifying and pursuing major opportunities. They understand the Federal market and the context of specific opportunities. They’ve helped us pursue opportunities much bigger opportunities than we would be able to on our own.
-Leverage Small Business Innovative Research (SBIR) funding which supports research and development for small tech companies
Administered by 11 federal agencies, the program aims to foster innovation by offering competitive grants to businesses that propose cutting-edge technological solutions to pressing challenges facing Federal agencies. The program provides financial support and also the validation and visibility that come with winning a competitive federal award. The non-dilutive nature of the funding means businesses retain full equity, allowing them to grow and innovate while maintaining complete control of their ventures.
– Research requirements thoroughly and hire experts to maintain strict compliance
Government contracts often come with stringent standards and specifications. For
instance, IT products and services must often meet specific security standards to comply with broader Federal regulations. It’s critical to understand and comply with these requirements. Winning a government contract can subject a business to increased scrutiny, including potential audits and performance evaluations. Compliance is an ongoing process. Non-compliance can lead to disbarment from Federal contracting, fines, or serious reputational damage. We’ve invested in building a knowledgeable team to navigate government procurement processes.
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